A look at ‘affordable’ housing in Seattle

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Depending on whether you’re a glass-half-empty or glass-half-full kind of person, you could read a recent report on Seattle’s home affordability one of two ways.

On the one hand, the personal-finance company Interest.com found, Seattle was the ninth-least affordable metro area among the 25 it studied. On the other hand, median wage-earners made nearly enough to buy a typical home hereabout without throwing their household finances too far out of whack.

The company first looked at median home prices in the 25 largest urban areas in the country. With a $290,700 median as of mid-2012, Seattle ranked seventh-highest in that category; assuming a 20 percent down payment, that means you’d need to borrow $232,560 to buy the median home.

Interest.com then looked at median household incomes (Seattle ranked fifth, at $64,085), and factored in local mortgage rates, property taxes, homeowners’ insurance and other household debt.

Ted Mossman, a spokesman for parent company Bankrate.com, said that to be considered “affordable” total housing costs (principal and interest on the mortgage, insurance and taxes) couldn’t take up more than 28 percent of household income, and housing costs plus other debt payments couldn’t be above 36 percent.

To meet those criteria, the median household income in metro Seattle would have to be $64,492 — 0.63 percent above the area’s actual median.

This is the first year Interest.com has done the survey, so there aren’t direct data about how local affordability has changed. But it’s not hard to guess why: Housing prices have fallen more than 26 percent since the peak of the boom, according to the S&P/Case-Shiller index, while median household income has risen just 2.4 percent.

Nor should the extremes of affordability and unaffordability surprise anyone.

In San Francisco, the median income was almost 33 percent below the “affordability” level; New York incomes were nearly 30 percent short, and San Diego’s median was about 26 percent shy of affordability.

You’d have better luck in Detroit, where the median selling price was $60,200 and the median income was more than 45 percent above the affordability level. Then again, you’d be living in Detroit.

Seven Washington-based credit unions had $1 billion or more in assets as of June 30, according to the Northwest Credit Union Association.

The largest, Tukwila-based BECU, also is the fourth-largest credit union in the nation, with $10.6 billion in assets and $71.7 million in net income as of June 30.

Also in the club are Washington State Employees ($1.7 billion in assets), Spokane Teachers ($1.7 billion), GESA ($1.2 billion), Numerica ($1.2 billion), Sound ($1.1 billion) and Hapo Community ($1 billion).

Washington is tied with Virginia for fifth-highest number of billion-dollar credit unions. And because of some recently announced mergers, there soon will be at least one more.

On Jan. 1, Seattle’s Prevail Credit Union will merge into the much larger Harborstone Credit Union of Lakewood, Pierce County.

The consolidation, one of the largest in recent memory, will push Harborstone’s combined assets over $1 billion.

Another pending merger will put Bremerton-based Kitsap Credit Union close to the $1 billion mark. Kitsap, which has more than $903 million in assets, is set to absorb Quimper Community Federal Credit Union of Port Townsend, with $45 million in assets, by Thursday.

Once those mergers are completed, Washington will have almost as many billion-dollar credit unions (eight) as banks (12).

Not that the banks like the company. The Washington Bankers Association says jumbo credit unions have an unfair edge over banks, because they pay little or no state taxes and no federal income tax.

In just the past two years, the big banks have seen their state tax bills more than double, said Jim Pishue, the trade group’s chief executive.

Taxing large credit unions like commercial banks would generate $28 million in business and occupation tax for the state’s coffers, Pishue said.

“As the state continues to look for additional sources of revenue, I think it would benefit and behoove them to take a look at the industry, at those credit unions that have morphed into banklike structures and offer the same banking services that commercial banks do,” Pishue said.

David Bennett, a spokesman for the credit-union association, responded that Congress has reaffirmed tax exemption for credit unions because of the co-op benefits they offer and the alternative they provide to banks.

“A lot of bankers would like nothing more than to see credit unions disappear,” Bennett said. “Taking tax exemption away would essentially eliminate a lot of their competition.”